SpaceX Loaned Elon Musk Some Money
Also AMC’s de-APE-ing, Apollo’s TRA and extinction credits.
Last year, Elon Musk offered to buy Twitter Inc. for about $44 billion, which required him to find $44 billion. Much of Musk’s money is tied up in shares of Tesla Inc., where he is chief executive officer, so he sold some Tesla shares to raise some of the money. For a while, his plan was to get some more of the money by borrowing against his remaining Tesla stake. He went and got commitment letters from a group of banks who agreed to lend him $12.5 billion, secured by $62.5 billion of Tesla stock. This was going to be a margin loan: If the price of Tesla stock dropped too much, Musk would have to post more cash or sell Tesla shares to repay some of the loan. This was a bit risky, and in fact Tesla fell by about 30% between the time Musk got the commitment letter and the time he closed the Twitter deal. That was in part because of the Twitter deal: It was obviously a distraction for Musk, and his sales of Tesla stock to pay for Twitter also drove down the price.
This made the margin loan less attractive, and ultimately Musk called it off: He raised money from outside investors and sold more Tesla stock to avoid having to borrow against his Tesla stock.